Certain that the French would protect Chad south of the 16th parallel, Habré started assembling his army, the Chadian National Armed Forces (FANT), at Kalaït, a logistic deposit built by France exactly at the 16th parallel, and which it had stocked with munitions, weapons and fuel. France and the United States had equipped the FANT with a large number of Toyota pickups, and antitank and antiaircraft missile launchers, such as MILANATGWs. The FANT assault under the command of Hassan Djamous deployed almost 3000 soldiers for the coming battle.

This powerful force attacked Fada, the capital of the Ennedi and a Libyan stronghold, on January 2. Hassan Djamous took the 1,000 Libyan soldiers and the 300–400 members of the Democratic Revolutionary Council (CDR) militia by surprise. In a short but brutal engagement the FANT almost annihilated the Libyan armoured brigade that defended Fada: 784 Libyans and CDR militiamen died, 92 T-55 tanks and 33 BMP-1infantry fighting vehicles were destroyed, and 13 T-55s and 18 BMP-1s captured, together with 81 Libyan soldiers. Chadian losses were minimal: only 18 soldiers died and three Toyotas were destroyed.

This was one of the first major combat victories employing the tactic of using light trucks armed with machine guns or rockets, later known as "technicals." This tactic mirrored the actions of the raids conducted by the Long Range Desert Group of World War II, but on a slightly smaller scale theater, against slightly less numerous enemies, but with more modern weaponry and equipment.

Although the Chadian commander's tactical ability played an important role in the victory, the anti-tank missiles were decisive. When combined with the superior maneuverability of the Toyotas, they proved their efficacy against the Libyan tanks.

On January 3 and 4 the Libyan Air Force sent several waves of bombers to Fada in an attempt to destroy the captured equipment and ammunition. Still, these could not change the essential fact that Libya had suffered a major defeat that was to prove the beginning of the end of the Chadian-Libyan War.